Institutional Investors and ‘Whales’ Push Bitcoin Demand to New Heights

March 27, 2024 Bitcoin.com

Latam Insights: El Salvador Won’t Sell Its Bitcoin, Bitcoin Spot ETFs Land In Brazil and Peru

March 4, 2024 Bitcoin.com

CME overtakes Binance to grab largest share of Bitcoin futures open interest

November 10, 2023 Coin Telegraph

Binance

Market analysts weigh in on an intriguing ‘flippening’, as Bitcoin futures open interest on global derivatives marketplace CME overtakes Binance.

Binance’s dominance of Bitcoin futures open interest has been toppled by traditional derivatives market place heavyweight Chicago Mercantile Exchange (CME), following Bitcoin’s first move past the $37,000 mark in over 18 months.

A number of analysts highlighted the ‘flippening’ of Binance by CME, with the latter overtaking the global cryptocurrency exchange for the largest share of Bitcoin futures open interest.

Wow, the real flippening that no one is talking about:

CME just flipped Binance for the largest share of Bitcoin futures open interest.

Bittersweet -- there will soon be more suits than hoodies here.

(h/t @VidiellaLaura) pic.twitter.com/SIPRLMlFcy
— Will (@WClementeIII) November 9, 2023

Open interest is a concept commonly used in futures and options markets to measure the total number of outstanding contracts. The metric represents the total number of contracts that are held by traders at any given point in time. The difference between the number of contracts that are held by buyers (longs) and the number of contracts held by sellers (shorts) determines open interest.

Bitcoin futures volume and open interest on CME over the past month. Source: CME

Bloomberg Intelligence exchange-traded fund (ETF) research analyst James Seyffart followed up an initial X (formerly Twitter) post from Will Clemente, questioning whether CME’s growing amount of Bitcoin futures open interest would appease the United States Securities and Exchange Commission’s (SEC) historical concerns over the depth of Bitcoin markets and the potential for market manipulation.

Okay this is interesting... Does this constitute 'market of significant size' now? haha https://t.co/eQb7QXvO3H
— James Seyffart (@JSeyff) November 9, 2023

This has long been a point of contention, which has led to the SEC holding back from approving several spot Bitcoin ETF applications over the past few years. The regulator previously told the likes of BlackRock and Fidelity that their filings were “inadequate” due to the omission of declarations relating to the markets in which the Bitcoin ETFs will derive their value.

In July 2023, the Chicago Board Options Exchange (CBOE) refiled a submission for Bitcoin spot ETFs following feedback from the SEC. Fidelity intends to launch its Bitcoin ETF product on CBOE, while BlackRock, the world’s largest asset manager, grabbed headlines for its proposed Bitcoin ETF, which is set to be offered on the Nasdaq.

CBOE’s amended filing with the SEC highlighted its efforts to take additional steps to ensure its ability to detect, investigate and deter fraud and market manipulation of shares in the proposed Wise Origin Bitcoin Trust.

“The Exchange is expecting to enter into a surveillance-sharing agreement with Coinbase, an operator of a United States-based spot trading platform for Bitcoin that represents a substantial portion of US-based and USD denominated Bitcoin trading.”

CBOE’s filing adds that the agreement with Coinbase is expected to carry the ‘hallmarks of a surveillance-sharing agreement.’ This will give CBOE supplemental access to Bitcoin trading data on Coinbase.

The stock exchange also added that Kaiko Research data indicated that Coinbase represented roughly 50% of the U.S. dollar to Bitcoin daily trading volume in May 2023. This is pertinent given the SEC’s misgivings over the depth of BTC markets to back ETF products.

A surveillance-sharing agreement is intended to ensure that exchanges and regulators are able to detect whether a market actor is manipulating the value of stocks or shares.

Magazine: US gov’t messed up my $250K Bitcoin price prediction: Tim Draper, Hall of Flame

Invesco and Galaxy’s joint spot Bitcoin ETF added to DTCC’s site

November 1, 2023 Coin Telegraph

Are Bitcoin ETFs headed for one epic Gensler ‘rugpull?’ Analysts weigh in

October 31, 2023 Coin Telegraph

bitcoin etf

While unlikely, Bloomberg’s ETF analysts conceded that there’s always a possibility that SEC Chair Gary Gensler could be waiting until the last moment to deny the flurry of pending spot Bitcoin ETF applications.

There’s a slim chance the United States Securities and Exchange chief Gary Gensler could pull the plug on spot Bitcoin (BTC) exchange-traded funds in one “amazingly sadistic” move, according to Bloomberg ETF analysts.

In an Oct. 31 tweet directed at senior Bloomberg ETF analysts James Seyffart and Eric Balchunas, ETF commentator Dave Nadig posed whether Gensler may be allowing for spot Bitcoin ETF applications to pile up just to deny them all at once in a “semi-comedic rug-pull.”

“I'm sure it will be much more boring than this -- but sometimes it does feel like this is all a setup for a giant Gensler semi-comedic rug-pull,” said Nadig.

I'm sure it will be much more boring than this -- but sometimes it does feel like this is all a setup for a giant Gensler semi-comedic rug-pull.
— Dave Nadig (@DaveNadig) October 30, 2023

Responding to the comment, Seyffart admitted that the thought of such a scenario has “lingered” in the back of his mind for weeks if not months. “Would be absolutely epic on his part though,” added Seyffart.

Balchunas also piped in, describing a potential rug pull as “amazingly sadistic” and noted that it would probably “trigger [a] wave of lawsuits,” in response.

However, while both analysts argued the scenario was unlikely, Balchunas conceded that a last-minute denial wasn’t entirely off the cards, and is why he and Seyffart won’t raise the odds of an approval to anything above 90%.

Gensler’s own thoughts on a spot Bitcoin ETF have recently made their way into the spotlight, with a video from 2019 showing Gensler describing the SEC’s position on spot ETF products at the time as “inconsistent.”

Meanwhile, the SEC has a long and storied history of denying spot Bitcoin ETF applications, a trend which began as far back as 2017.

This legacy has been carried on by Gensler since he was appointed head of the SEC in 2021. Since then Gensler has delayed and pushed back recent spot Bitcoin ETF applications, citing concerns with investor protections.

In June 2022, the Gensler-led SEC was sued by crypto asset manager Grayscale for rejecting its bid to convert its existing Bitcoin trust into a spot ETF, with a court ruling that the SEC the SEC was “arbitrary and capricious” to reject the application. The SEC did not appeal the decision.

To date, the SEC has only approved ETF applications for Bitcoin and Ether (ETH) futures products, as it claims that spot products do not have the sufficient safeguards to protect investors from market manipulation.

Magazine: Beyond crypto — Zero-knowledge proofs show potential from voting to finance

Crypto market ‘dramatically underestimates’ bullishness of spot Bitcoin ETFs

September 6, 2023 Coin Telegraph

bitcoin bull market

“It’s reckless not to aggressively accumulate BTC at current levels,” K33 senior analyst Velte Lund said in a recent report.

The potential of a spot Bitcoin (BTC) exchange-traded fund (ETF) approval to drive prices up is dramatically underestimated by the crypto market, claim analysts from crypto research firm K33 — formerly Arcane Research.

In a Sept. 5 market report, K33 senior analyst Vetle Lunde and vice president Anders Helseth said the last three months had greatly improved the chances of a spot Bitcoin ETF approval despite the sentiment not being reflected in the price of Bitcoin or other mainstay crypto assets.

The analysts explained while Bitcoin had all but given up its gains in the wake of Grayscale’s legal victory over the Securities and Exchange Commission — an approval would “attract enormous inflows” and significantly increase buying pressure for Bitcoin.

*Bitcoin returned its gains in the wake of Grayscale's victory. Source: K33 Research*

However, the downside of a potential spot ETF rejection would be “negligible” and Bitcoin prices would simply maintain business as usual, they wrote.

Lunde and Helseth added that given the increased likelihood of spot ETF approvals — with several Bloomberg analysts now predicting a 75% chance of approval within the year — the market's outlook on ETFs is fundamentally incorrect.

“I firmly believe the market is wrong. This is, by all accounts, a buyer’s market, and it’s reckless not to aggressively accumulate BTC at current levels.”

Bolstering their bullish prediction, the analysts looked to the recent 2% gain in the tech-heavy Nasdaq-100 index, often viewed as an indicator of the broader market's risk appetite.

ETH set to outperform BTC

Additionally, Lunde and Helserth shared their optimism for the price of Ether (ETH), explaining that ETH appears likely to outperform Bitcoin over the next two months as it will benefit from strong momentum ahead of a futures-based ETF listing.

They explained Ether may track a similar path to Bitcoin which gained roughly 60% in the weeks leading up to the launch of the first Bitcoin futures-based ETF on Oct. 19, 2021.

The verdict on a futures-based Ether ETF is slated to be handed down in mid-October which is reportedly set to get the green light from the SEC.

Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in

Bitcoin futures data hints at $22K as the next logical step

September 4, 2023 Coin Telegraph

Bitcoin futures data hints at K as the next logical step

basis

BTC derivatives flipped bearish after Bitcoin failed to establish bullish momentum despite the heightened spot ETF prospects.

A Bitcoin (BTC) price correction down to $22,000 is becoming increasingly likely as BTC derivatives have begun to exhibit bearish tendencies.

The price chart of Bitcoin leaves little doubt that investor sentiment worsened after the much-hyped victory by Grayscale Asset Manager against the U.S. Securities and Exchange Commission (SEC) on Aug. 29 and the postponement of multiple spot BTC exchange-traded fund (ETF) requests by the SEC.

The central question remains whether the prospects of an ETF can outweigh the growing risks.

Spot Bitcoin ETF hype is fading

By Aug. 18, the entire 19% rally that occurred following BlackRock ETF initial filing had fully retracted as Bitcoin moved back to $26,000.

Next, there was a failed attempt to reclaim the $28,000 support as investors raised the odds of an ETF approval following the positive news on Grayscale Bitcoin Trust (GBTC) request.

*Bitcoin/USD price index, 1-day. Source: TradingView*

Cryptocurrency investors' morale deteriorated as the S&P 500 index closed at 4,515 on Sept. 1, merely 6.3% below its all-time high from January 2022. Even gold, which hasn't been able to break above the $2,000 level since mid-May, is 6.5% away from its all-time high. Consequently, the general feeling for Bitcoin's investors just 7 months ahead of its halving in 2024 is certainly less positive than expected.

Some analysts will pin Bitcoin's lackluster performance on the ongoing regulatory actions against the two leading exchanges, Binance and Coinbase. Moreover, multiple sources claim that the U.S. Department of Justice (DOJ) is likely to indict Binance in a criminal probe. The claims are based on allegations of money laundering and potential violations of sanctions involving Russian entities.

Moreover, multiple sources claim that the U.S. Department of Justice (DOJ) is likely to indict Binance in a criminal probe. The claims are based on allegations of money laundering and potential violations of sanctions involving Russian entities.

North Code Capital CIO and Bitcoin supporter Pentoshi expressed the current conditions in a social network post:

I think we still will eventually get some bearish Binance news vs DoJ. That should be seen as opportunity!

But overall. We also likely get ETF’s this year or early next year and $btc heading to 401k’s

Said it before but this is a year for accumulation. Don’t lose sight of the…
— Pentoshi euroPeng (@Pentosh1) September 1, 2023

According to Pentoshi, the potential gains from a spot ETF approval outweigh the price impact from the eventual regulatory actions against the exchanges. There's no way to ascertain whether such an assumption is valid, but such an analysis fails to consider that U.S. inflation, as measured by CPI, has come down to 3.2% in July 2023 from 9.1% in June 2022.

Moreover, the U.S. Federal Reserve's (Fed) total assets have been reduced to $8.12 trillion, down from the recent $8.73 peak in March 2023. This signals that the monetary authority has been draining liquidity from the markets, which is detrimental to Bitcoin's inflation protection thesis.

Looking at a longer time frame, Bitcoin's price has been holding the $25,000 level since mid-March, but taking a closer look at derivatives data shows that bulls' conviction is getting tested.

Bitcoin derivatives show decreasing demand from bulls

Bitcoin monthly futures typically trade at a slight premium to spot markets, indicating that sellers are asking for more money to delay settlement. As a result, BTC futures contracts in healthy markets should trade at a 5 to 10% annualized premium — a situation known as contango, which is not unique to crypto markets.

*Bitcoin one-month futures annualized premium. Source: Laevitas.ch*

Bitcoin's current 3.5% futures premium (basis rate) is at its lowest point since mid-June, prior to BlackRock's filing for a spot ETF. This indicator reflects a decreased demand for leverage buyers utilizing derivative contracts.

Traders should also analyze options markets to understand whether the recent correction has caused investors to become less optimistic. The 25% delta skew is a telling sign when arbitrage desks and market makers overcharge for upside or downside protection.

In short, if traders anticipate a Bitcoin price drop, the skew metric will rise above 7%, and phases of excitement tend to have a negative 7% skew.

*Bitcoin 30-day options 25% delta skew. Source: Laevitas.ch*

As displayed above, the options' 25% delta skew has recently entered bearish territory, with protective put (sell) options trading at a 9% premium on Sep. 4 compared to similar call (buy) options.

BTC futures hint at $22,000 next

Bitcoin derivatives data suggests that the bearish momentum is gaining strength, especially since the approval of a spot ETF could potentially be deferred until 2024, given the SEC's concerns about the lack of measures to prevent a significant portion of trading occurring on unregulated offshore exchanges based on stablecoins.

Meanwhile, the uncertainty in the regulatory landscape does favor the bears as there's no way to dismiss the fear, uncertainty, and doubt (FUD) surrounding potential actions from the DOJ or the ongoing lawsuits against the exchanges by the SEC.

Ultimately, a retracement down to $22,000 — the level last seen when Bitcoin’s futures premium was 3.5% — is the most likely scenario, considering the recent inability to sustain a positive price momentum despite the heightened chances of a spot Bitcoin ETF approval.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

SEC’s first deadlines to approve 7 Bitcoin ETFs coming over the next week

August 30, 2023 Coin Telegraph

Appeal

Analysts say the best-case scenario is the SEC approves the batch of spot Bitcoin ETFs but it may also exercise its right to an appeal.

The United States Securities and Exchange Commission is facing its first deadlines to decide on seven new Bitcoin (BTC) spot exchange-traded fund applications with the latest being Sept. 4 amid its defeat to Grayscale Investments in a U.S. federal appeals court.

Investment firm Bitwise will learn if its ETF will win the SEC’s approval on Sept. 1 while BlackRock, VanEck, Fidelity, Invesco and Wisdomtree will all be awaiting the SEC’s decision for their funds by Sept. 2, according to several SEC filings.

Meanwhile, Valkyrie is set to hear back from the SEC on Sept. 4.

*List of recent Bitcoin spot ETF applicant filing dates and deadlines. Source: Bloomberg*

The U.S. Court of Appeals ruled on Aug. 29 that the SEC’s rejection of Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF was “arbitrary and capricious” — but it doesn’t mean the SEC must approve Grayscale’s application or others in the future, says Bloomberg ETF analyst James Seyffart.

In an Aug. 29 Bloomberg interview, Seyffart explained Grayscale’s win “definitely” increases the odds of a successful outcome for the next wave of applicants.

He isn’t sure when that day may come though, as the SEC can delay its decisions and has two more proposed deadlines for each fund before being forced to make a final decision on the 240th day post-filing.

For the awaiting applicants, the final deadlines for the SEC are al mid-March next year.

99.99999% of the world doesn't know that the SEC has to decide on 7 BTC ETFs within the next 3 days:

-blackrock
-bitwise
-vaneck
-wisdomtree
-invesco
-fidelity
-valkyrie

the suits at our doorstep
— odin free (@odin_free) August 29, 2023

What are the SEC’s options post-Grayscale decision?

After today’s ruling in favor of Grayscale, the regulator has 90 days to file an appeal with the U.S. Supreme Court or apply for an En banc review — where a full circuit court can overturn a ruling made by a three-judge panel.

However, the SEC hasn’t made clear what its next move will be.

If the SEC doesn’t appeal the court will need to specify how its ruling is executed which could include instructing the SEC to approve Grayscale’s application, or at the very least revisit it.

Either way, Seyffart only saw two viable options for the regulator.

The first is for it to concede defeat and approve Grayscale’s conversion of its GBTC to a Bitcoin spot ETF.

Alternatively, the SEC would need to revoke the listing of Bitcoin futures ETFs entirely or deny Grayscale’s application based on a new argument, said Seyffart.

The second potential avenue is to deny on reasons not used before/yet... which i have been saying for months could have to do with Custody or settlement of #Bitcoin which is not something that futures ETFs have to worry about. SEC has made a lot of noise around custodians
— James Seyffart (@JSeyff) August 29, 2023

However, fellow Bloomberg ETF analyst Eric Balchunas considered the odds of the SEC revoking the Bitcoin futures ETFs as “highly unlikely” because of the SEC's reported openness to Ethereum futures ETFs.

Lol, this guy turned the last paragraph of Judge Rao's legal smackdown today into an MGMT-esque sythe banger. Really captures the mood rn, well done.. https://t.co/BBJZR5O6To
— Eric Balchunas (@EricBalchunas) August 29, 2023

Magazine: Hall of Flame: Wolf Of All Streets worries about a world where Bitcoin hits $1M

ARK Invest, 21Shares join queue to offer Ethereum futures ETF

August 24, 2023 Coin Telegraph

21shares

The co-filing comes just a week after reports emerged that the SEC is likely to greenlight Ethereum ETF applications.

Investment firms ARK Invest and 21Shares have teamed up to apply for two Ethereum futures exchange-traded funds after reports emerged last week that the United States securities regulator could soon begin approving applications.

The two proposed Ethereum futures ETFs are “ARK 21Shares Active Ethereum Futures ETF” (ARKZ) and the “ARK 21Shares Active Bitcoin Ethereum Strategy ETF” (ARKY), according to an Aug. 24 filing to the Securities and Exchange Commission.

The filing states that ARKZ would invest at least 25% of its total assets in cash-settled Ethereum futures contracts, such as those traded on the Chicago Mercantile Exchange (CME).

*ARK 21Share has filed two more Bitcoin/ Ethereum ETF applications to the SEC. Source: SEC.*

ARKY, on the other hand, will consist of both Bitcoin and Ethereum futures contracts.

Empowered Funds has been assigned as investment advisor for the two Ethereum products.

Ark Invest and 21Shares first partnered to launch a spot Bitcoin ETF in 2021.

The SEC knocked back its first two attempts in March 2022 and January. Its most recent Bitcoin spot ETF application was filed in April — about two months before $10 trillion firm BlackRock put in its own application.

However, the SEC recently labeled many of the Bitcoin spot ETF applications as inadequate, which prompted ARK 21Shares and other applicants to add in a surveillance sharing agreement to their applications.

The investment firms are also awaiting the outcomes of Ark 21Shares Active Bitcoin Futures ETF (ARKA) and Ark 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC),

Magazine: DeFi Dad, Hall of Flame: Ethereum is ‘woefully undervalued’ but growing more powerful

Bitcoin price will surge past $150K if spot ETFs are approved: Analyst

August 17, 2023 Coin Telegraph

Bitcoin price will surge past 0K if spot ETFs are approved: Analyst

bitcoin etf

Even if the filings for Bitcoin spot ETFs are rejected, Lee predicts Bitcoin’s halving event will still push up BTC's price — but not to six figures.

The price of Bitcoin (BTC) will surge past an eye-watering $150,000 by the end of 2024, as long as the current slew of United States spot-Bitcoin exchange-traded funds (ETFs) are approved, according to investment research boutique Fundstrat.

In an Aug. 16 interview on CNBC’s Squawk Box, Fundstrat’s managing partner and head of research Tom Lee predicted that a bundle of successful Bitcoin spot ETF applications will shift Bitcoin’s supply-demand dynamics towards considerable price appreciation.

When asked what the price of Bitcoin could be by the end of next year, Lee didn’t hold back:

“If the spot Bitcoin (ETF) gets approved, I think the demand will be greater than the daily supply of Bitcoin, so the clearing price [...] is over $150,000, it could even be like $180,000.”

Lee clarified that this could be the case so long as it is a United States-approved spot Bitcoin ETF, as there are already spot Bitcoin ETFs in Europe.

“If the Spot #Bitcoin ETF gets approved … the clearing price of $BTC is above $150,000.” – Tom Lee @fundstrat pic.twitter.com/ILQZqdjsZA
— Michael Saylor⚡️ (@saylor) August 16, 2023

The United States currently makes up 97.7% of the global trading volume for crypto-related ETFs, according to Bloomberg senior ETF analyst Eric Balchunas. Once spot Bitcoin ETFs are approved, this could go to 99.5%, he said.

However, even if the spot ETF applications are rejected, Lee still predicts a considerable price push to come from Bitcoin’s next halving event, expected to take place in April 2024.

“You will have a drop in supply again, so the clearing price has to increase. But it won’t be six figures.”

In June, Wall Street heavyweights Fidelity, Invesco, Wisdom Tree and Valkyrie followed the world’s largest asset manager BlackRock in applying for a Bitcoin spot ETF with the SEC.

However, some of these firms may not learn their fate until sometime in 2024 as the SEC has up to 240 days to make a final decision on an application after commencing the review process.

The outcome of Grayscale’s appeal to convert its GBTC trust product into a Bitcoin spot ETF is however expected to come sooner rather than later.

Bloomberg ETF analysts Eric Balchunas and James Seyffart recently estimated that there’s a 65% chance of these Bitcoin spot ETFs being approved by the securities regulator — a significant increase from before BlackRock’s application.

Other have tipped that a $100,000 Bitcoin price could come much sooner than expected, with Blockstream CEO Adam Back recently wagering that Bitcoin will notch the new price milestone the month before the halving event.

However, not everyone is inclined to agree. Jesse Myer, the co-founder of Bitcoin investment firm Onramp, explained on Aug. 15 that the market would only price in the changed reality 12-18 months post-halving.

“Bitcoin won’t surge to $100k before the next halving,” he said.

Magazine: Hall of Flame: Wolf Of All Streets worries about a world where Bitcoin hits $1M

bitcoin spot etf